Friday, April 15, 2011

No Respite From the Time Clock: A Bleak Future for Older Americans

A startling development has taken place in the U.S. employment picture. According to "Why The Middle Aged Are Missing Out on Jobs" these people (ages 45—54) are having a tough time finding jobs. In itself, that's not unusual as employers are more inclined to hire younger workers (and indeed this age group is experiencing gains in employment) . But the wild card in the deck is that competition is coming from another source: Seniors. Not only are more older employees staying on the job past retirement age, but they are more successful than their middle-aged counterparts in snagging new jobs that have come into existence since 2009 as well.  In other words, middle aged employees as a whole are losing  jobs faster than seniors are finding new ones.

But all this begs the question. Why are older people staying in the workforce beyond retirement age, such that they and their younger—but not that much younger—counterparts are competing with each other for jobs?  According to "Why The Middle Aged Are Missing Out...",  in 2001, 33% of seniors were in the workforce. In 2007, the figure was 39%.  It's unlikely that the size of the increase can be attributed to many more older folks' suddenly enjoying work so much that they don't want to retire.

For some time now middle age employees despite years of experience have faced being undercut and replaced by people in their twenties or early thirties. And as mentioned, when the former are displaced, they often have a hard time finding new positions often not only because of age discrimination but also because they came from a higher salary level than their younger and less experienced counterparts. So wouldn't it stand to reason that still older workers would face a similar hurdle?  Unfortunately, the article doesn't explain this anomaly.

My guess is that seniors are being chosen over middle-aged workers because they will work for less. Many older people  lost their nest eggs assets such as 401(k) investments in the Great Recession or otherwise lack the resources for retirement in the first place. But they do receive social security, which however by itself  is not enough to survive on. Hence they must stay in the labor force to make up the difference. I know if my wife and I had to repatriate, that would be our lot. We would most likely have to keep working until we drop dead in our traces.

However, many older workers, i.e. those in the age range of 55—62 years of age do not yet qualify for social security. But perhaps out of desperation, they are willing to work for less than their slightly younger counterparts. Regardless, it should never have come to the point that two vulnerable groups, the older and middle aged workers should be pitted against each other this way.  And both face the prospect of an uncertain future that people in this age range haven't encountered in many decades, at or near the point in their lives that they should instead be reaping the rewards from their years of service in the labor force..

It's an indictment of the American economic system that such a cruel state of affairs has come to pass.


Vol-E said...

I understand your premise, but don't completely agree with it. Please check out Emily Yoffe's post on Slate:

The arbitrary retirement age is an artificial construct. Maybe people should have a "goal date" of retirement to look forward to, but I'm more inclined to think it's just something we've gotten used to over the decades. I'm 52 and feel that I'm just hitting my stride, career-wise, and barring a catastrophic health event, would like very much to keep working until 75 or 80. And I don't even LIKE my job all that much! I've just seen too many people flounder and lose their sense of purpose and value after retirement - even those who had planned for it. I'm glad we're rethinking the whole concept.

But in line with what you're saying, the key to making all of this work is for employers to make work feel a little less like slavery, and for the economic safety net to be solidly in place and reinforced for those who can't keep it going.

Secular Guy said...


Thanks for your reply. I read but it doesn't change my viewpoint or the premise of my post, which I'm afraid you've misinterpreted.

I don't favor a mandatory retirement age which in the U.S. has long since been officially abolished anyway. For those elderly people who enjoy their work and are still competent, more power to them. But even they mayn face age discrimination barriers by employers even though that practice is illegal.

But older workers who--due to economic and / or health circumstances want to retire--should not be forced to stay at a job in which they are unhappy and / or no longer fit to perform. Yet Even Yoffe indirectly acknowledges that's what's happening (defined contributions providing an insufficient retirement income),

Vol-E, you mention that you're 52 and want to keep working at a job that you don't care for. That doesn't make sense if you intend to stay in the work force for two or three more decades. If you feel that the prospective unintended consequences of retirement outweigh your dissatisfaction with your present position, why not just change jobs, or even careers if necessary and that way have the best of both worlds? Could the (not unfounded) specter of age discrimination be holding you back? If so, then as the years pass, you may find your dissatisfaction growing and putting you in an an untenable situation. At that point something will have to give.

BTW I wouldn't count on employers voluntarily improving working conditions for workers regardless of age. That's not how capitalism works. The name of the game is productivity which comes from employers squeezing the juice out of the workers without increasing their wages or benefits. Pile on the work till they drop and then replace them with new and still fewer employees and repeat the process. Or outsource their positions to the world's cheapest labor markets such as the Philippines or Bangladesh for still lower wages and even higher productivity.

So I don't understand those who flounder or lose their sense of purpose when they hang it up. They must have confused their careers with their identity. Big mistake. Personally, I couldn't wait for the opportunity to retire shortly before I became eligible for social security at age 62 (rather than 66, even if it meant a smaller monthly benefit, a more modest life style, and expatriation in order to afford making the change).

That was almost six years ago, and I have never felt so alive since I stopped working. There are so many things to do to constructively occupy my time and keep myself active. I hope to stay independent, reasonably healthy, and never to be forced to punch a time clock again.